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Accounting

The International Accounting Standards Board (IASB) and the Financial
Accounting Standards Board (FASB) each published an exposure draft
(ED) containing joint proposals to improve and align the accounting
for business combinations (
www.iasb.org/current/ed.asp ; www.fasb.org/draft ). The
proposals retain the current requirement in both International
Financial Reporting Standard 3 and FASB Statement no. 141 to account
for all business combinations by means of a single method, in which
one party always is identified as acquiring the other. Among the
principal changes would be a requirement to measure the acquired
business at fair value and recognize the goodwill attributable to any
noncontrolling interests, not just to the acquirer.

The SEC released a staff report on off-balance-sheet arrangements,
special purpose entities and transparency of filings by issuers
reflected in a sample of filings by 200 public companies (
www.sec.gov/news/studies/soxoffbalancerpt.pdf ). In the report,
which the Sarbanes-Oxley Act requires the SEC to deliver to the
president and Congress, commission staff recommended among other
things that FASB reconsider and refine its accounting guidance for
defined-benefit pension and other post-retirement benefit plans and
for leases. The report also discouraged companies’ use of transactions
motivated primarily by accounting and reporting—rather than
economic—considerations.

FASB issued Staff Position (FSP) no. 150-5, Issuer’s Accounting
under FASB Statement No. 150 for Freestanding Warrants and Other
Similar Instruments on Shares That Are Redeemable (
www.fasb.org/fasb_staff_positions/fsp_fas150-5.pdf ). The
guidance is effective for reporting periods beginning after June 30,
2005.